Fire Hydrant of Freedom

http://www.theblaze.com/stories/charles-krauthammer-analyzes-president-obamas-reaction-to-white-house-leaks-question/

After President Obama’s news conference Friday morning, a Fox News panel, including Pulitzer Prize-winning columnist Charles Krauthammer, took a moment to analyze one of the most talked-about portions of the presser: the president’s reaction to being asked about whether members of his administration were leaking classified information to help his reelection bid.

“The notion that my White House would purposely release classified national security information is offensive,” the president said.

Krauthammer believes the president’s response was a misstep.

“I think he’ll regret having made this statement the same way he’ll regret the idea about the private sector doing okay,” said the columnist.

Watch Krauthammer’s analysis at the 2:33 mark (via Fox News):


He continued:

If it is offensive, the idea that it would’ve been leaked, when we know that in the report itself it included White House officials, then let him prove it by having a special council appointed. From what you said, they would’ve said ‘appoint a special council’ (had it been the equivalent of a “Scooter” Libby investigation).

So what does Krauthammer think is the next step in this growing story?

“The key here is (Senator) Dianne Feinstein. If she demands it, it’ll be done,” Krauthammer said.

“And she’s the Democratic Chair of the Senate Intelligence [Committee],” Fox host Chris Wallace clarified.

“She’s the democratic, liberal chair. She’s extremely angry over these leaks, she should be, and she’s the one who needs to speak out right now,” Krauthammer added.

http://www.youngresearch.com/authors/recession-pending-this-indicator-says-so/?awt_l=PWy8k&awt_m=3au.bOMII0zlu1V

Objectivist:

You express yourself very well.   Though I oppose gay marriage, I would regard the "civil unions" you propose a reasonable compromise.   However, I wonder if this compromise be a lasting compromise, or would it be seen like the military's DADT policy-- a step towards gay marriage. 

Perhaps the true and deeper question presented is this:  "Throughout recorded history" that some people find homosexual behavior , , , off-putting.  Does the State have the right to make this thought illegal?

Meanwhile, in New Mexico, a Christian photographer who declined to photograph a same-sex commitment ceremony (New Mexico recognizes nether same-sex marriage nor civil unions) was found guilty by the NM Human Rights Commission of "sexual orientation" discrimination. Now, the state Court of Appeals has sided with the Commission, ruling that the photographer must pay almost $7,000 in fines and it's ludicrously claiming that forcing the photographing of the wedding in violation of the photographer's conscience counts among "reasonable regulations and restrictions."
Given the pervasive homosexual agenda, one would think the homosexual population must be quite large. Indeed, a 2011 Gallup poll showed that more than one-third of respondents thought that more than 25 percent of Americans are homosexual. The truth, however, is that fewer than 5 percent of Americans identify themselves as such. This, however, is a reality that neither the homosexual lobby nor the Leftmedia want America to acknowledge.


Patriot Post

Around the Nation: Regulations for Thee, but Not for Me

California Democrat Gov. Jerry Brown has discovered one way to cut into the projected $100 billion price tag of his cherished high-speed railroad through the Central Valley: forgoing the very same environmental regulations he enforced as the state's attorney general. In order to get the project underway early next year, Brown is calling on California's legislature to limit the legal challenges environmentalists can throw at the project, which would simply replace carbon-belching automobiles and aircraft traveling up and down the state with trains powered by electricity created in fossil fuel-burning power plants. Key among these revisions to normal environmental review is allowing the state to make changes without going through the entire review process again.

Predictably, environmental groups gave Brown's proposal a chilly reception. "Environmental review is not going to slow this project," claimed Sierra Club California director Kathryn Phillips. She also chided the "ineptitude" of the California High-Speed Rail Authority over the last four years.

One is led to wonder, though, why more projects and development can't qualify for expedited treatment and waivers in a state crying for jobs. Brown used a similar environmental approach on a proposed football stadium in Los Angeles, saying the shortcuts were necessary to "get people working." Taxpayer-funded boondoggles aren't the only needed infrastructure in the Golden State, and those Central Valley farmers who can't get water because of the sanctity of a nondescript two-inch fish probably wonder how they ended up on the wrong side of the tracks.


Patriot Post

Dick Morris reports that the calculation of the 17% number excluded absentee voters (about 15% of the total) who DM says tended to support MR.

I'm on pain medication at the moment, so perhaps my analytical skills at the moment are off-center, but my reaction to this is that sure we can measure more accurately, but we already know the bottom line.  The question presented is what to do about it-- and spending more time measuring the various manifestations of Pak perfidy is but a procrastination.

http://www.nytimes.com/2012/06/08/us/politics/44-percent-of-americans-approve-of-supreme-court-in-new-poll.html?nl=todaysheadlines&emc=edit_th_20120608

http://pjmedia.com/blog/making-reporters-use-government-equipment-to-write-about-jobs-numbers/?singlepage=true

If you aren't following Jennifer Rubin, the right-wing columnist for the left-wing Washington Post, you should. Here's her latest, and I think she is spot on. I think it's becoming quite clear that Obama will lose in a landslide this November. There are huge and very important things going on these days that portend very optimistic things for the future of the country and the economy-- Scott Grannis

Obama is killing the Democratic Party
By Jennifer Rubin

President Obama, I have frequently argued, has been fabulous for the conservative movement. He spurred the creation of the tea party. He helped the GOP win the House majority in 2010 and make big gains in the Senate. His Obamacare has helped revive the Commerce Clause and given a boost to conservative jurisprudence. His refusal to support human rights has caused a bipartisan revulsion and reminded us that foreign policy must be girded by American values. He’s sent independents running into the GOP’s arms. He’s forced conservatives to think hard and express eloquently principles of religious liberty, limited government, free markets and Constitutional democracy.

Obama also has wrecked havoc in the the Democratic Party. He’s firmly affixed the “tax and spend” label to it after Bill Clinton declared that the era of big government was over. He’s made Clinton into a pitch man for Mitt Romney. His rejection of the Keystone XL pipeline has split the party. His refusal to adopt the Simpson-Bowles commission’s recommendations has turned Democrats into reactionaries, defending the status quo on entitlements. He’s alienated Jewish voters. He’s re-McGovernized the party, which now stands for appeasing despotic powers, turning on allies and slashing defense spending.
As Ross Douthat wrote, “House Republicans have spent the past two years taking tough votes on entitlement reform, preparing themselves for an ambitious offensive should 2012 deliver the opportunity to cast those same votes and have them count. The Senate Democrats, on the other hand, have failed to even pass a budget: There is no Democratic equivalent of Paul Ryan’s fiscal blueprint, no Democratic plan to swallow hard and raise middle class taxes the way Republicans look poised to swallow hard and overhaul Medicare. Indeed, there’s no liberal agenda to speak of at the moment, beyond a resounding ‘No!’ to whatever conservatism intends to do.”

Not even Jimmy Carter did this much, I would suggest, to jerk his party to the left and hobble its electoral prospects. No wonder Clinton is on a rampage.

Rather than spin endless excuses and blame it all on money, liberal elites might want to reconsider tying themselves too tightly to Obama’s mast. They have already become quite whiny and sacrificed a good deal of intellectual rigor in trying to defend every misstep as brilliant and every loss as a win.

They should take a page from the conservative playbook from the second Bush term. Then, conservatives stuck by their principles, criticized him where appropriate and maintained their integrity. That was a wise choice. Presidents, especially inept ones, come and go, but parties, journalists and political movements need to endure more than four years.

WSJ

Crony Capitalism and the Crisis of the West
In Italy and Greece, the most talented don't get ahead. That's also increasingly true in the United States.
By LUIGI ZINGALES

As Greece sinks toward a financial abyss—and Portugal, Italy and Spain sit on the edge—can we in the United States consider ourselves safe?

Fundamental economic numbers offer little reassurance. At 8.6% of gross domestic product, the U.S. budget deficit is just under Greece's (9.1%) and equal to Spain's. U.S. debt, at 103% of GDP, is just below Portugal's—which first asked for a European Union bailout in 2011—and 58% larger than Spain's, which might soon need one.

Yet Americans should be concerned for a deeper reason. High deficits, high debt and unsustainable entitlements are symptoms of a common disease infecting Southern Europe and the U.S. That's crony capitalism, a problem with which I, having lived in Italy, am unfortunately familiar.

Cronyism has a long history in Italy, where historically the Catholic Church enjoyed tremendous influence. Popes and other members of the hierarchy wielded—and often abused—enormous power, including that of placing their children and friends in positions of influence, regardless of merit. A truly competitive market has no place for favoritism, but when one company or institution dominates a market, such practices become inevitable.

In Italy today, even emergency-room doctors gain promotions on the basis of political affiliation. Instead of being told to study, young people are urged to "carry the bag" for powerful people in the hope of winning favors. Mothers push their daughters into the arms of the rich and powerful, seeing it as the only avenue of social promotion. The nation's talent-selection process is broken: One routinely finds highly intelligent people employed in menial jobs while mediocre people often hold distinguished positions.

Once an incompetent appointee finds himself in a powerful position, he tends to hire only subordinates of equal or lower quality, since more talented people pose a threat to him. After a few years, a firm's human capital will become so eroded that it won't be able to compete without some form of protection. The more protection it can gain from government, the greater the scope of the cronyism, which in turn makes protection even more necessary. Crony capitalism creates a vicious circle.

Between 2001 and 2011, Italian per capita GDP dropped 4%. A low—or in Italy's case, negative—growth rate makes it difficult to meet basic social obligations. When growth is high, it's much easier to satisfy everyone without burdening future generations. But when the pie shrinks, the temptation to shift the burden onto someone else is irresistible—hence growing future entitlements and expanding budget deficits. During the 10 years of negative growth, the Italian debt-to-GDP ratio increased to 120% from 109%.

The worst consequence of crony capitalism is political. The more a system is dominated by cronies, the more it generates resentment. To maintain consensus, the insiders must distribute privileges and subsidies—and the more they dole out, the greater the demand becomes.

Traditionally, the U.S. has enjoyed a relatively honest democracy and transparent form of capitalism, which encouraged robust economic growth and contained the hunger for entitlements. This is less and less true. The U.S. tax code is filled with loopholes and special exemptions. Political connections increasingly count more than innovative ideas; young entrepreneurs often learn to lobby before they learn how to run a business.

Seven out of the 10 richest counties in the U.S. are in the suburbs of Washington, D.C., which produces little except rules and regulations. Even worse, the slow growth and decreased social mobility of the last decade have damaged the free market's reputation as a creator of prosperity. The hundreds of millions of dollars awarded for disastrous economic performance—from Robert Rubin's salary as chairman of almost-bankrupt Citigroup to government loans for the actually bankrupt solar company Solyndra—have in turn weakened public belief in the system's fairness.

For the U.S., the moment to act is now, before the cancer of crony capitalism metastasizes. The tax code needs an overhaul that eliminates special treatment and bans any form of corporate subsidy—starting with too-big-to-fail banks. We must find ways to introduce more competition into sectors such as education and health care, while expanding economic opportunity for those at the lower end of the income spectrum. And we must curb the political power that large industry incumbents have over legislation. Not only does it distort legislation, it also forces new entrants to compete on lobbying instead of concentrating on making more innovative and cheaper products.

It is not too late for the United States, but the clock is ticking. We have already begun to look like Italy. If we don't do something to stop that soon, we will end up like Greece.

Mr. Zingales is a professor at the University of Chicago Booth School of Business and a contributing editor to City Journal. His book, "A Capitalism for the People: Recapturing the Lost Genius of American Prosperity," was published this week by Basic Books.

I remember that.  He got some very good ideas onto the ballot (anti-gerrymandering measure being another IIRC) but apparently did not realize the firestorm of opposition from the unions that would result or the disproportionate effect of union mobilization in elections where major offices are not in play and voter turn out is less.

I agree, he lost all fighting spirit after the defeat of these measures.

http://www.gsnmagazine.com/article/2...x_ied_attacker
ATF puts up $10,000 reward for info on Phoenix IED attacker

Fri, 2012-06-01 10:16 AM By: Mark Rockwell


 6-volt handheld flashlight

A series of three bomb attacks in Arizona using flashlights converted into IEDs has the ATF offering a $10,000 reward for the maker of the devices.
The Bureau of Alcohol, Tobacco, Firearms and Explosives (ATF) Phoenix Field Division special agent in charge Thomas Atteberry said on May 31 that the reward would be given for information leading to the arrest and conviction of the person or persons responsible for the recent bombings in Glendale and Phoenix, Arizona.
ATF, FBI, Glendale Police Department and the Phoenix Police Department are currently investigating these incidents, said the ATF.
Three Victim-Operated Improvised Explosive Devices (VOIEDs), have been detonated in the Phoenix area since mid-May. The devices are contained within yellow plastic 6-volt handheld flashlights. The devices exploded when the victims picked up what they thought was a discarded item and flipped the on/off switches to see if the flashlights worked.
Two of the incidents occurred in Glendale, AZ, on May 13 and May 14, said ATF. The third incident took place in Phoenix, Arizona, on May 24, it said. Five people received minor injuries related to the detonation of the three devices. ATF said it was withholding further details about the IEDs “to avoid compromising the criminal investigation.”
In the May 13, Glendale incident, the flashlight was left near a business and found in the landscaping area for the business. Two people received minor injuries.
On May 14 in Glendale, a flashlight was discovered in the landscaping area for a second business and one person received minor injuries.
On May 24, in Phoenix, the flashlight was found by an employee of a Salvation Army Rehabilitation facility while sorting through donations to the Salvation Army. Two individuals received minor injuries in that explosion, said ATF.
"We are offering a $10,000 reward for information that leads to the arrest and conviction of the person or persons responsible for these criminal bombings," said Atteberry, Special Agent in Charge of ATF. "Our immediate concern is that of public safety, if anyone discovers a flashlight that does not belong to them or appears out of place, no matter the color or shape, DO NOT attempt touch or manipulate the flashlight in any way. We are confident the public can assist in providing additional information.”
The agency encourage anyone with information about the crimes is to call its toll-free, 24-hour hotline at 1-888-ATF-BOMB (1-888-283-2662).

GOA Sues ATF to Produce Documents
 
The foundation of Gun Owners of America today filed suit in the U.S. District Court for D.C. to compel the Bureau of Alcohol, Tobacco, Firearms and Explosives (ATF) to produce thousands of documents related to Operation Fast & Furious.
 
Depending upon the outcome of this case, Justice Department officials could spend time in jail.
 
Last year, Gun Owners Foundation submitted a Freedom of Information Act (FOIA) which -- not surprisingly -- has virtually been ignored by the ATF. Although the agency has told GOF several times that it would comply with the FOIA request, the ATF has violated each and every one of its self-imposed deadlines.
 
On March 16, 2011, Congressman Darrell Issa, Chairman of the House Committee on Oversight and Government Reform, sent a letter to ATF requiring production of records related to their involvement in Operation Fast & Furious -- where thousands of firearms were smuggled from the United States to Mexico.
 
On April 21, 2011, Gun Owners Foundation submitted its own FOIA request to the ATF, to which the ATF has responded in various ways. The agency has sometimes ignored our requests entirely. Several times, ATF has promised (but failed) to produce information by a certain date. And at least once, the ATF suggested we were mistaken, claiming that they had already given us the requested information -- only to follow up that communication with a new promise and new deadline for producing the requested documents.
 
If the court finds in favor of the GOF complaint, the ATF will have to produce the requested documents or face “contempt of court” charges. Given that media reports indicate the House of Representatives may decline to press contempt charges, Gun Owners Foundation remains committed to pressing this case until justice is realized.
 
Please help Gun Owners Foundation to continue doing this important work. You can contribute to GOF at: http://www.gunowners.com/donate.htm

"If Congress can do whatever in their discretion can be done by money, and will promote the General Welfare, the Government is no longer a limited one, possessing enumerated powers, but an indefinite one, subject to particular exceptions." --James Madison, letter to Edmund Pendleton, 1792

I have Scott's permission to quote his thoughts:

SCOTT GRANNIS:

(From an earlier email:  Interest rates will only go up if the economy does better. Meanwhile, look at Japan where their debt burden and their deficit are both much bigger than ours relative to GDP and yet interest rates are even lower than ours

If the economy strengthens then the tax base expands and tax revenues go up. Meanwhile the average maturity of federal debt is very short. The yield curve is positively sloped so that means that higher interest rates are already factored in to some degree, so higher rates are not a death sentence by any stretch. Moreover, a stronger economy would likely happen if policies improved, so even as interest rates rose the deficit could shrink as a percent of GDP.

The way out of the current predicament is growth. The election this year has a good chance to deliver that.)

Part of his responce to the end of the dollar article I just posted here:

"I'm an original gold bug and no fan of fiat currencies, but I do think you have to acknowledge that the fears of many--including yours truly--that the Fed would print massively and destroy the value of the dollar have not been realized. In fact, the dollar has been rising against most currencies for the past year, and it has been rising against gold and most commodities as well. And inflation has gone down in the past year. To be sure, the dollar is still very weak, but it is most definitely not collapsing against any objective standard in the past year.

"Thank goodness the Fed undertook QE 1 and QE 2, otherwise there would have been a massive shortage of dollar liquidity at a time when the entire world was attempting to deleverage (i.e., when the entire world's demand for dollar liquidity was skyrocketing). If the Fed had not acted, we would have most likely suffered a replay of the Great Depression. The Fed greatly expanded the availability of dollars at a time when the world wanted a ton of extra dollars. That's exactly what they are supposed to do, and it would appear to have worked."

MARC: 
I’d be in over my head even more than usual in a discussion with you of QE1-2 (though perhaps Tom can chime in) (and I do wonder at the costs of it to savers) Yes gold has backed off from over $1800, yet it has not been so long since gold was $250 (back when Glen Beck first recommended IIRC LOL)  and it is now well above $1500.  A six-fold increase seems rather dramatic to me , , ,  Though I cannot cite chapter and verse, I’m rather confident that similar numbers can be found with regard to food, energy, and other commodities. 
 
If I have my numbers right, the Feds borrow 40% of what they spend and get 60-70% of that by printing it!   Each trillion dollars of debt run up by the Feds means about $3333 per citizen and we are projected to run deficits of that magnitude as far as the eye can see and that is with straight line assumptions of revenue increases starting with 1/1/13’s taxageddon.  Baseline budgeting creates an Orwellian newspeak that makes developing understanding of WTF is going on impossible.  Then there is the matter of unfunded liabilities of entitlements in the face of the realities of American demographics. Oh, , , and California is bankrupt.
 
Is The Market efficient (I used to believe so) or is it some giant casino wherein ordinary people like me are pigeons to be plucked and fuct as we are whipsawed by the winds of computer trading programs and other forces having not so much to do with merit?
 
How does all this end well?



SCOTT:    "To be sure there are all kinds of problems out there. The U.S. economy would be booming right now if it weren't for all the fucted up policies coming out of Washington for the past many years. Big Government is smothering economies all over the world. It's awful. The Fed is scaring the sh*t out of everyone because we've never seen them do anything like this.

"But before you jump out the window of the nearest skyscraper, consider the following. There are a number of things that are actually improving.

"To begin with, the Fed has not been printing money, contrary to what everyone seems to believe. The Fed has bought $1.6 trillion of notes and bonds, but they have paid for them not with printed-up dollar bills, but with bank reserves. The vast majority of those reserves have never seen the light of day (in the form of actual money used to run the economy). They are sitting on the Fed's balance sheet. What the Fed has effectively done is to to a massive swap with the rest of the world: the Fed has handed out massive amounts of T-bill substitutes (i.e., reserves that pay interest equivalent to T-bills) in exchange for an equal amount of notes and bonds. Since the dollar has not collapsed and inflation has not gone to the moon and the M2 money supply has not exploded to the upside, we can pretty confidently conclude that the Fed's actions were almost exactly what the world demanded. In short, the Fed expanded the supply of safe-haven dollar liquidity in order to accommodate the world's almost insatiable desire for such liquidity. When money supply rises in line with money demand, this is not inflationary.

"As for federal government finances, it seems to be a well-kept secret that the deficit as a % of GDP (the only sensible way to measure it) has dropped by a lot: from 10.4% to 7.4% in the past two and a half years. That's almost a 30% reduction! And thanks mainly to the fact that federal spending has barely increased at all over that period. Congress has been gridlocked, thank goodness. If we can keep this up the deficit will sooner or later come back down to earth and the world as we know it will not end.

"Imagine if Romney wins (which he will, in a landslide I think) and we get spending restraint and meaningful tax reform (lower rates and a bigger base). And Obamacare gets thrown out (as it will, I predict). And Scott Walker doesn't get recalled (looking very likely at this point). We could get a sea-change in the outlook: a shrinking of Big Government. The possibilities are fantastic.

"As for the market, I really don't think that computer trading programs are distorting things. Logic alone can tell you that. Speculators (or computer programs) cannot survive if they add to the market's volatility, because they can only do that if they buy high and sell low. Before too long, anyone doing that in size will end up bankrupt. They can only survive if they buy low and sell high, and that is a very good thing, since it adds liquidity to the market and minimizes volatility."

Semi-plausible Dem lines of defense:

a) Outspent by out of state money (10 to 1 was claimed?!?)
b) many Dem voters didn't think a recall was called for
c) 17% of Walker voters will vote for BO (quoting something I didn't see from the Bret Baier Report)

http://www.dailymail.co.uk/sciencetech/article-2154405/Secret-mission-accomplished-Americas-secret-space-plane-land-YEAR-orbit--knows-did-there.html

http://pjmedia.com/blog/l-a-times-entry-for-worst-reporting-of-the-year/

http://www.nytimes.com/2012/06/05/world/special-ops-leader-seeks-new-authority-and-is-denied.html?_r=1&nl=todaysheadlines&emc=edit_th_20120605

How The U.S. Dollar Will Be Replaced
Thursday, 17 May 2012 05:03 Brandon Smith
 
After being immersed in the world of alternative economic analysis for several years, it sometimes becomes easy to forget that most people do not track forex markets, or debt to GDP ratio, or true unemployment, or hunch over IMF white-papers highlighting subsections which expose the trappings of the globalist ideology.  Sometimes, you just assume the average person knows what the heck you are talking about.  This is, of course, a mistake.  However, it is a mistake that is borne from the inadequacy of our age and our culture, and is not necessarily a product of weak character, either of the analyst, or the casual reader.   

The great frustration of being actively involved in the Liberty Movement is the fact that many people are rarely on the same page (or even the same book) during political and economic discussion.  Where we see the nature of the false left/right paradigm, they see “free democracy”.  Where we see a tidal wave of destructive debt, they see a “responsible government” printing and spending in order to protect our “best interests”.  Where we see totalitarianism, they see “safety”.  Where we see dollar devaluation, they see dollar strength and longevity.  Ultimately, because the average unaware citizen is stricken by the disease of normalcy bias and living within the doldrums of a statistical fantasy world, they simply have no point of reference by which to grasp the truth when exposed to it.  It’s like trying to explain the concept of ‘color’ to a man who has been blind since birth.

Americans in particular are prone to reactionary dismissal when exposed to facts that disrupt their misconceptions.  Our culture has experienced a particularly prosperous age, not necessarily free from all trouble, but generally spared from widespread mass tragedy for a generous length of time.  This tends to breed within societies an overt and unreasonable expectation of ease.  It generates apathy, and laziness.  A crushing blubberous slothful cynicism subservient to the establishment and the status quo.  Even the most striking of truths struggle to penetrate this smoky forcefield of duplicitous funk.

In recent articles, I have outlined the very immediate dangers of several potential economic events that are likely to take place this year, including the exit of peripheral countries from the European Union, the conflict between austerity and socialist spending in France and Germany, the developing bilateral trade agreements between China and numerous other countries which cut out their reliance on the U.S. dollar, and the likelihood that the Federal Reserve will announce QE3 before the end of 2012.  All of these elements are leading in one very particular direction:  the end of the Greenback as the world reserve currency. 

In response to these assertions I have received letters from some people (some of them indignant) questioning how it would be even remotely possible that the dollar could be replaced at all.  The concept is so outside their narrow world view that many cannot fathom it. 

To be sure, the question is a viable one.  How could the dollar be unseated?  That said, a few hours of light research would easily produce the answer, but this tends to be too much work for the fly-by-night financial skeptic.  Sometimes, the job of the alternative analyst is to make the obvious even more obvious. 

So, let’s begin…

The Dollar A Safe Haven?

This ongoing lunacy is based on multiple biases.  For some, the dollar represents America, and a collapse of the currency would suggest a failure of the republic, and thus, a failure by them as individual Americans who live vicariously through the exploits of their government.  By extension, it becomes “patriotic” to defend the dollar’s honor and deny any information that might suggest it is on a downward spiral. 

Others see how the investment world clings to the dollar as a kind of panic room; a protected place where one’s saving will be insulated from crisis.  However, just because a majority of day trading investors are gullible enough to overlook the Greenback’s pitfalls does not mean those dangerous weaknesses disappear. 

There is only one factor that shields the dollar from implosion, and that is its position as the world reserve currency.  Without this exalted status, the currency’s value vanishes.  Backed by nothing but massive and unpayable debt, it sits frighteningly idle, like a time bomb, waiting for the moment of ignition.   

The horrifying nature of the dollar is that it is only valuable so long as foreign investors believe that we will pay back the considerable debts that we (the American taxpayer at the behest of our criminally run Treasury) owe, and that we will not hyperinflate in the process.  If they EVER begin to see their purchases of dollars and treasuries as a gamble instead of an investment, the façade falls away.  Yet again this year Congress and the Executive Branch are “at odds” over the expansion of the debt ceiling, which has been raised to levels beyond the 100% of GDP mark:

http://www.nytimes.com/2012/05/17/us/politics/obama-presses-congress-to-act-on-his-priorities.html

Barack Obama has made claims that increases in the debt ceiling are “normal”, and that most presidents are prone to hiking the barrier every once in a while.  Yet, back in 2006, when George W. Bush increased debt limits, Obama had this to say:

"The fact that we are here today to debate raising America's debt limit is a sign of leadership failure. It is a sign that the U.S. Government can't pay its own bills…Instead of reducing the deficit, as some people claimed, the fiscal policies of this administration and its allies in Congress will add more than $600 million in debt for each of the next five years…Increasing America's debt weakens us domestically and internationally. Leadership means that 'the buck stops here.' Instead, Washington is shifting the burden of bad choices today onto the backs of our children and grandchildren. America has a debt problem and a failure of leadership. Americans deserve better."

For once, Barack and I agree on something.  Too bad the man changes his rhetoric whenever it’s to his advantage. 

Today, Obama now asserts that raising the debt ceiling is not an opening for more government spending, but an allowance for the government to pay bills it has already accrued.  This is disingenuous and hypocritical prattle.  Obama is well aware as are many in Congress that as long as the Federal Government is able to raise the debt ceiling whenever it suits them, they can increase spending with wild abandon.  It’s like handing someone a credit card with no maximum limit.  For most men, the temptation would be irresistible.  Therefore, one can predict with 100% certainty that U.S. spending will never truly be reduced, and that our national debt will mount in tandem until we self destruct.

How has this trend been able to continue for so long?  Our private central bank has created the fiat machine by which all economic depravity is possible.  Currently, the Federal Reserve is the number one holder of U.S. debt.  The Federal Reserve creates its own capital.  It prints its wealth from thin air.  The dollar, thus, has become its own lynchpin.  The secretive institution which has never been subject to a full audit is now monetizing endless debt mechanisms with paper promises.  What value would any intelligent investor put on such a fraudulent economic system?           

The epic dysfunction of the dollar is rooted in its reliance on perception rather than tangible wealth or strong fundamentals.  It is, indeed, like any other fiat unit, with all the inevitable pitfalls built into its structure.

Ironically, the value of the Dollar Index is measured not by its intrinsic buying power, or its historical buying power, but its arbitrary buying power in comparison with other collapsing fiat currencies. 

The argument I hear most often when pointing out the calamitous path of the dollar is that it is the go-to safe haven in response to the crisis in Europe.  What the financially inept don’t seem to grasp is that the shifting of savings back and forth between the euro and the dollar is just as irrelevant to our currency’s survival as it is to Europe’s.  BOTH currencies are in decline, and this is evident by the growing inflationary pressures on both sides of the Atlantic.  Ask any consumer in Greece, Spain, France, or the UK how shelf prices have changed in the past four years, and they will say the exact same thing as any consumer in the U.S.; costs have gone way up.  Therefore, it makes sense to compare the dollar’s value not to the euro, or to the Yen, but something more practical, like the dollar of the past….

In 1972, just as Nixon was removing the dollar from the last vestiges of the gold standard, a new car cost an average of $4500.  A home cost around $40,000.  A gallon of gas was .36 cents.  A loaf of bread was .25 cents.  A visit to the doctor’s office was $25.  Wages were certainly lower, but they kept much better pace with the prices of the era.  Today, the gap between wages and inflation is insurmountable.  The average family is unable to keep up with the flashflood of rising prices.

According to the historic buying power of the dollar, the currency is a poor safe haven investment.  With the advent of bailout efforts and debt monetization through quantitative easing, its devaluation has been expedited dramatically.  The Fed has left the door open for what I believe will be a final destructive round of publicly announced QE, weakening the dollar to near death:

http://www.reuters.com/article/2012/05/16/us-usa-fed-idUSBRE84F12320120516

The question then arises; why do foreign countries continue to buy in on the greenback?

The Dollar Dump Has Already Begun

One of my favorite arguments by those defending the dollar is the assertion that no foreign country would dare to dump the currency because they are all too dependent on U.S. trade.  To answer the question above, the reality is that foreign countries ARE already calmly and quietly dumping the dollar as a global trade instrument. 

To those people who consistently claim that the dollar will never be dropped, my response is, it already has been dropped!  China, in tandem with other BRIC nations, has been covertly removing the greenback as the primary trade unit through bilateral deals since 2010.  First with Russia, and now with the whole of the ASEAN trading bloc and numerous other markets, including Japan.  China in particular has been preparing for this eventuality since 2005, when they introduced the first Yuan denominated bonds.  The bonds were considered a strange novelty back then, especially because China had so much surplus savings that it seemed outlandish for them to take on treasury debt.  Today, the move makes a whole lot more sense.  China and the BRIC nations today openly call for a worldwide shift away from the dollar:

http://news.xinhuanet.com/english2010/indepth/2011-08/06/c_131032986.htm

With the global proliferation of the Yuan, and the conversion of the Chinese economy away from dependence on exports (especially to the West) towards a more consumer based system, the Chinese have effectively decoupled from their reliance on U.S. markets.  Would a collapse in the U.S. hurt China’s economy?  Yes.  Would they still survive?  Oh yes.  Far better than America would, at least…

In 2008, I warned of this development and was attacked on all sides by more mainstream economists and Keynesian proponents who stated that such a development was impossible.  Today, it’s common knowledge that our primary creditors are “diversifying” away from the dollar, though MSM talking heads and those who parrot them still claim that this is not a threat to our economy.

To be clear, the true threat to the dollar’s supremacy is not only due to the constant printing by the private Federal Reserve (though that is a nightmare in the making), but the loss of faith in our currency as a whole.  The Fed does not need to throw dollars from helicopters to annihilate our currency; all they have to do is create doubt in its viability.
The bottom line?  A dollar collapse is not “theory” but undeniable fact in motion at this moment, driven by concrete actions on the part of the very nations that have until recently propped up our debt obligations.  It is only a matter of time before the dollar diminishes and fades away.  All signs point to a loss of reserve status in the near term. 

What Will Replace The Dollar?

My next favorite argument in defense of the Greenback is the assertion that there is “no currency in a position to take the dollar’s place if it falls”.  First of all, this is based on a very naïve assumption that the dollar will not fall unless there is another currency to replace it.  I’m not sure who made that rule up, but the dollar is perfectly able to be flushed without a replacement in the wings.  Economic collapse does not follow logical guidelines or the personal pet peeves of random man-child economists.

Though, to be fair, and to educate those unaware, there IS a replacement already conveniently ready to roll forward.  The IMF has for a couple of years now openly called for the retirement of the dollar as the world reserve currency, to be supplanted by the elitist organization’s very own “Special Drawing Rights” (SDR’s):

http://www.guardian.co.uk/business/2011/feb/10/imf-boss-calls-for-world-currency

The SDR is a paper mechanism created in the early 1970’s to replace gold as the primary means of international trade between foreign governments.  Today, it has morphed into a basket of currencies which is recognized by almost every country in the world and is in a prime position to take the dollar’s place in the event that it loses reserve status.  This is not theory.  This is cold hard reality.  For those who claim that the SDR is not considered a “real currency”, they should probably warn the U.S. Post Office, which now uses conversion tables that denominate costs in SDR’s:

http://pe.usps.com/text/imm/immc3_007.htm

So, now that we know a replacement for the dollar is ready to go, the next obvious question would be:

Why would global elites destroy a useful monetary tool like the dollar?  Why kill the goose that "lays the golden eggs"?

People who ask this question are simply unable to see outside the fiscal box they have been placed in.  For global bankers, a paper currency is not important.  It is expendable. Like a layer of snake skin; as the snake grows, it sheds the old and dawns the new. 

At bottom, men who promote the philosophies of globalization greatly desire the exaltation of a global currency.  The dollar, though a creation of a central bank, is still a semi-sovereign monetary unit.  It is an element that is getting in the way of the application of the global currency dynamic.  I find it rather convenient (at least for those who subscribe to globalism) that the dollar is now in the midst of a perfect storm of decline just as the IMF is ready to introduce its latest fiat concoction in the form of the SDR.  I find the blind faith in the dollar’s lifespan to be rife with delusion.  It is not a matter of opinion or desire, but a matter of fact that currencies in such tenuous positions fall, and are in the end replaced.   I believe that the evidence shows that this is not random chance, but a deliberate process, leading towards the globalist ideal; total centralization of the world under an unaccountable governing body which operates a global monetary system utterly devoid of transparency and responsibility.   

The dollar was a median step towards a newer and more corrupt ideal.  Its time is nearly over.  This is open, it is admitted, and it is being activated as you read this.  The speed at which this disaster occurs is really dependent on the speed at which our government along with our central bank decides to expedite doubt.  Doubt in a currency is a furious omen, costing not just investors, but an entire society.  America is at the very edge of such a moment.  The naysayers can scratch and bark all they like, but the financial life of a country serves no person’s emphatic hope.  It burns like a fire.  Left unwatched and unchecked, it grows uncontrollable and wild, until finally, there is nothing left to fuel its hunger, and it finally chokes in a haze of confusion and dread…

http://www.theblaze.com/stories/painful-every-step-of-the-way-top-epa-official-inadvertently-tells-the-truth-about-the-white-houses-environmental-agenda/

 

By ALAN M. DERSHOWITZ
Now that Israel has a broad and secure national unity government, the time is ripe for that government to make a bold peace offer to the Palestinian Authority.

The Palestinian Authority refuses to negotiate unless Israel accepts a "freeze" on settlement building in the West Bank. Israel accepted a 10-month freeze in 2009, but the Palestinian Authority didn't come to the bargaining table until weeks before the freeze expired. Its negotiators demanded that the freeze be extended indefinitely. When Israel refused, they walked away from the table.

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The West Bank settlement of Mevo Horon
.There is every reason to believe that they would continue such game-playing if the Israeli government imposed a similar freeze now, especially in light of current efforts by the Palestinian Authority and Hamas to form their own unity government, which would likely include elements opposed to any negotiation with the Jewish state.

That is why Prime Minister Benjamin Netanyahu should now offer a conditional freeze: Israel will stop all settlement building in the West Bank as soon as the Palestinian Authority sits down at the bargaining table, and the freeze will continue as long as the talks continue in good faith.

The first issue on the table should be the rough borders of a Palestinian state. Setting those would require recognizing that the West Bank can be realistically divided into three effective areas:

• Those that are relatively certain to remain part of Israel, such as Ma'ale Adumim, Gilo and other areas close to the center of Jerusalem.

• Those that are relatively certain to become part of a Palestinian state, such as Ramallah, Jericho, Jenin and the vast majority of the heavily populated Arab areas of the West Bank beyond Israel's security barrier.

• Those reasonably in dispute, including some of the large settlement blocs several miles from Jerusalem such as Ariel (which may well remain part of Israel, but subject to negotiated land swaps).

This rough division is based on prior negotiations and on positions already articulated by each side. If there can be agreement concerning this preliminary division—even tentative or conditional—then the settlement-building dispute would quickly disappear.

There would be no Israeli building in those areas likely to become part of a Palestinian state. There would be no limit on Israeli building within areas likely to remain part of Israel. And the conditional freeze would continue in disputed areas until it was decided which will remain part of Israel and which will become part of the new Palestinian state. As portions of the disputed areas are allocated to Palestine or Israel, the building rules would reflect that ongoing allocation.

I recently proposed this idea to a high-ranking Israeli official. His initial reaction was mostly positive, but he insisted that it would be difficult to impose an absolute building freeze in any areas in which Israelis currently live. He pointed out that families grow and that new bedrooms and bathrooms are needed in existing structures as a simple matter of humanitarian needs. I reminded him that Mr. Netanyahu has repeatedly stated that Israel is prepared to make "painful compromises" in the interests of peace.

An absolute building freeze would be such a painful but necessary compromise. It might also encourage residents of settlements deep in the West Bank to move to areas that will remain part of Israel, especially if the freeze were accompanied by financial inducements to relocate.

Such a proposal by Israel would be an important first step and a good test of the bona fides of the Palestinian side. Since their precondition to negotiation will have been met by the promise of a freeze (to begin the moment they sit down to negotiate), they would have no further excuse for refusing the Israeli offer to try to resolve the conflict.

The conditional freeze would also test the bona fides of the Israeli government, which would no longer have the excuse that any freeze would risk toppling a fragile coalition that relies on right-wingers who have threatened to withdraw in the event of another freeze. The new national unity government is now sufficiently large and diverse that it could now survive a walk-out by elements opposed to any freeze.

Once the parties reach a preliminary agreement regarding the three areas and what could be built where, they could get down to the nitty-gritty of working on compromises to produce an enduring peace.

These compromises will require the Israelis to give up claims to areas of the West Bank that were part of Biblical Israel but that are heavily populated by Palestinians. It will require the Palestinians to give up any claim to a massive "right of return" for the millions of descendents of those who once lived in what is now Israel. It will require an agreement over Jerusalem, plus assurances about Israel's security in the Jordan Valley and in areas that could pose the threat of rocket attacks like those that have come from the Gaza Strip in recent years.

Both sides say they want peace. In my conversations with both Israeli and Palestinian leaders, I have repeatedly heard the view that "everyone" knows what a pragmatic, compromise resolution will look like. Each side claims that the other side has erected artificial barriers to reaching that resolution.

If the building freeze issue can be taken off the table, one of the most controversial and divisive barriers will have been eliminated. The Israeli government should take the first step, but the Palestinian Authority must take the second step by immediately sitting down to negotiate in good faith.

Mr. Dershowitz is a law professor at Harvard. His latest book is "Trials of Zion" (Grand Central Publishing, 2010).

Normally I avoid the Bill Maher show, but, expecting fireworks, I tuned in to watch when I saw both Paul Krugman and Art Laffer would be on.  Laffer really didn't do or say that much, but I did run across an argument, pushed my Maher, that I had not seen before.

The gist of it is that due to a change in the filibuster rules, a bunch of bills that would have passed under the old rules failed to pass under the new rules (which require 60 votes).

I'm hoping BD or someone can shed some light on this.

Edited to add this from today's WSJ

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By BRIAN REARDON And ERIC UELAND
There's a growing chorus complaining that the Senate is broken, that Republicans are to blame, and that the rules of procedure need to be changed. This argument has any number of flaws, but at its core it relies on a general misrepresentation of how the Senate, and the filibuster in particular, works.

For example, here's how Politico's congressional reporter Scott Wong characterized the situation as part of a recent story on a lawsuit brought against the Senate by Common Cause to declare the filibuster unconstitutional:

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Senate Majority Leader Harry Reid
."From 1981 to 2006, both parties used the filibuster when they were in the minority. During that period, the majority party in each Congress filed fewer than 90 cloture motions to overcome a filibuster by the minority.

"But since Democrats seized power in fall 2006, Republicans have turned to the filibuster far more frequently. The majority has averaged about 140 cloture motions in both the 110th and 111th Congress. And Democrats are on pace to repeat that feat again this Congress."

So Republicans are to blame for all those cloture petitions to end filibusters, right? Wrong. The fact that the majority has filed so many cloture petitions is as much a symptom of its own efforts to block the Senate from working its will as anything the minority has done. Consider this example.

On March 19, Robert Menendez (D., N.J.) introduced legislation (S. 2204) to promote renewable energy with the cost offset by a tax hike on large oil producers. The normal process would have been for this legislation to be referred to committee for action.

Majority Leader Harry Reid bypassed the committee process, however, and using something called Rule 14 had the bill placed directly on the Senate calendar. Two days later, he started the process to call up the bill by moving to "proceed to it" and immediately filed a cloture petition to end debate on that motion.

The following Monday, the Senate then voted 92-4 to curtail debate on the motion to proceed to the bill. The next day, as soon as the bill was before the Senate, Mr. Reid offered five consecutive amendments and one motion in order to effectively block the consideration of any competing amendments or motions.

He then filed a cloture motion to close out debate on the bill. Two days later, the Senate rejected cloture on a party-line vote and moved on to other business, leaving the Menendez bill adrift.

Now go back to the Politico story and ask yourself how exactly Republicans filibustered this bill? They didn't have time to filibuster anything, it was over so quickly. Moreover, their ability to take meaningful action was effectively nullified by four specific parliamentary maneuvers taken by Mr. Reid.

Why does the majority go to all this trouble? The simple answer is to protect its members from tough votes.

The Senate is a wide open forum where almost any issue can be raised and voted on at almost any time. This environment is a function of the Senate's tradition of unlimited debate, but it does leave members vulnerable to having to vote on difficult issues at inconvenient times, like when they are up for re-election.

In response, Majority Leader Reid has adopted the practice of blocking amendments from being offered. No amendments, no surprises, and no tough votes.


Taken alone, Sen. Reid's actions on S. 2204 are not historically unique. Every recent majority leader has used them on occasion. But what used to be relatively rare has been repeated dozens of times in recent years.

The very first bill considered by the Senate after the election of President Obama and a filibuster-proof Democratic majority was adopted under exactly the same truncated process used for S. 2204—Rule 14, cloture, block out any competing amendments, cloture. Since that time, the Senate has voted on cloture repeatedly, yet has very little to show for it: By some measures, 2011 was the least productive session in modern congressional history.

So where does that leave us?

Lawsuits like the one filed by Common Cause are frivolous public-relations efforts and will be rejected by the courts—the Constitution grants the Senate the right to craft its own rules, after all. But the possibility that the Democratic majority, threatened at the polls and frustrated by the current legislative stalemate, will move to change long-standing Senate rules to further limit debate and make it harder for senators to offer amendments on behalf of their beliefs is very real and must be strenuously opposed.

As we have seen, any systematic effort to block amendments, short-circuit debate, and force a preordained outcome turns the Senate into a legislative dead end. The salutary news is that on bills where the Democratic majority actually worked with the Republican minority to respect their rights to help craft bills and to debate and propose amendments, the Senate has been able to work its will and pass legislation—for example, the recent reauthorization of the Food and Drug Administration's user-fee program.

The Senate is the most uniquely American of all our federal institutions. It is a powerful and proud body that has protected us and our freedoms for more than 200 years. In order to work properly, however, senators must have their freedom too—the freedom to debate and offer amendments and, ultimately, vote. That is what they were elected to do, and that is how the Senate should work.

Mr. Reardon is a principal at Venn Strategies, and served on the National Economic Council under President George W. Bush. Mr. Ueland is vice president of the Duberstein Group and was chief of staff to former Senate Majority leader Bill Frist.